Objectives Of Pricing in Business Firms

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Questions and Answers

What role does pricing play in the economy?

Prices regulate production, distribution, and consumption in the economy.

How does competition on price impact firms?

Competition on price weeds out inefficient firms and compels the remaining ones to maximize efficiency.

What factors influence pricing decisions?

Pricing decisions require intelligent judgement on market conditions, customer relations, and up-to-date knowledge of trends in sales and demand.

Why has the significance of pricing in the marketing mix increased?

The significance of pricing in the marketing mix has increased due to growing competition, declining product life cycles, consumer sensitivity to prices, rising distribution channel power, recession, and demand for labor-intensive services. Signup and view all the answers

How do prices impact the allocation of resources?

Prices influence the allocation of resources by signaling the relative scarcity and value of goods and services. Signup and view all the answers

What challenges are associated with pricing decisions?

Pricing decisions are challenging due to the consideration of several intangible and supply factors, requiring sound judgement on market conditions and customer relations. Signup and view all the answers

How do prices impact the level of employment in the country?

Prices influence the level of employment by affecting the demand for labor in different sectors of the economy. Signup and view all the answers

What is the role of pricing in weeding out inefficient firms?

Competition on price helps weed out inefficient firms by forcing them to improve efficiency or risk being priced out of the market. Signup and view all the answers

How do prices influence the bargaining power of distribution channels?

Prices impact the bargaining power of distribution channels by affecting the margins and profitability of intermediaries. Signup and view all the answers

Why is pricing considered a difficult function in marketing?

Pricing is considered a difficult function in marketing because it involves the consideration of various intangible and supply factors, requiring intelligent judgement and knowledge of market conditions. Signup and view all the answers

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